Group Health Insurance

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Features of Group Health Insurance

A group health insurance plan provides medical coverage at very affordable premiums. Individual members of a group get automatic coverage under the master policy if the group buys insurance for them.

Who can buy group health insurance? 

Recognised groups, such as employer-employees, trade unions, clubs, associations, etc., can buy a group health insurance plan for their members. Only groups already in existence can buy such mediclaim insurance; groups formed for buying insurance are not eligible.

How does a group mediclaim policy work?

When a group buys health insurance, individual members do not get different policies. Instead, the insurer issues a single or master policy. This master policy names all the group members covered in the policy and their respective coverage.

Policyholder and beneficiaries

Insurers issue group health insurance plans in the name of the group. Thus, the group acts as the policyholder and the covered members are beneficiaries. So, if ABC Private Limited buys group medical insurance for its employees, it becomes the policyholder and its employees become the insured members.

What is the sum insured?

The insurance company determines the sum insured for each member. The sum insured that the company opts for will be applicable to each employee separately. Infact, sometimes this sum assured can also be extended to the employee’s family. This means that even if an employee exhausts their sum insured, other members will still have access to their individual covers. Typically, sum assured ranges between Rs 1 and 5 lakhs per employee.

Premiums: cost and payment

The premiums for group health insurance plans are usually low and therefore, affordable. The group or its members can pay this or they can come up with an arrangement to share the cost. The insurance company, however, collects premium from the policyholder and not from individual beneficiaries.

No medical check-ups needed

Group mediclaim insurance has simpler underwriting guidelines. Thus, medical check-ups are not mandatory for inclusion, regardless of age. So, even if members suffer from pre-existing diseases like diabetes, they will be covered under group mediclaim insurance.

No waiting periods

Waiting period refers to the time an insured person must wait before claiming coverage under insurance. Group mediclaim plans have minimal or no waiting periods for most treatments. Insurers even cover pre-existing illnesses from the first day of the plan itself.

Cashless treatments

If the insured member takes treatments at a network hospital, the insurance allows cashless settlement of claims. This means that the insurer pays the hospital directly for expenses.

Tenure of the policy

A group mediclaim insurance plan is offered for one year, after which it can be renewed. On renewal, coverage can continue only after fresh underwriting. The sum insured and the premium can change during renewal.

Coverage for dependents

Many group health insurance plans offer coverage not only for group members but also for their dependents (spouses, children, and/or parents).

No co-payment clause

To insure people aged 60 and above through individual insurance, insurance companies may apply a co-payment clause, which requires individual policyholders to bear part of the claim. However, group health insurance plans do not have co-payment clauses; the insurer settles claims in full.

These are the features that make group health insurance plans an attractive proposition.

Additional Read:  What Is Covered Under Group Health Insurance?

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